The problem of determining the behavior of physical systems subsequent to the occurrence of malfunctions is discussed. It is established that while it was reasonable to assume that the most important fault behavior modes of primitive components and simple subsystems could be known and predicted, interactions within composite systems reached levels of complexity that precluded the use of traditional rule-based expert system techniques. Reasoning from first principles, i.e., on the basis of causal models of the physical system, was required. The first question that arises is, of course, how the causal information required for such reasoning should be represented. The bond graphs presented here occupy a position intermediate between qualitative and quantitative models, allowing the automatic derivation of Kuipers-like qualitative constraint models as well as state equations. Their most salient feature, however, is that entities corresponding to components and interactions in the physical system are explicitly represented in the bond graph model, thus permitting systematic model updates to reflect malfunctions. Researchers show how this is done, as well as presenting a number of techniques for obtaining qualitative information from the state equations derivable from bond graph models. One insight is the fact that one of the most important advantages of the bond graph ontology is the highly systematic approach to model construction it imposes on the modeler, who is forced to classify the relevant physical entities into a small number of categories, and to look for two highly specific types of interactions among them. The systematic nature of bond graph model construction facilitates the process to the point where the guidelines are sufficiently specific to be followed by modelers who are not domain experts. As a result, models of a given system constructed by different modelers will have extensive similarities. Researchers conclude by pointing out that the ease of updating bond graph models to reflect malfunctions is a manifestation of the systematic nature of bond graph construction, and the regularity of the relationship between bond graph models and physical reality.